Fiscal Equalization with Hidden Information and Hidden Action

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Kirn, T. (2014). Fiscal Equalization with Hidden Information and Hidden Action. Presented at the Conference "Reforming Public Service Delivery", L'Université de Lausanne, IDHEAP.


Präsentation auf wissenschaftlicher Konferenz


This paper studies the local tax policy setting behavior within a federal system under hidden information and hidden action by considering the incentive effects arising from elections and yardstick competition. It differsfrom earlier contributions by combining auction theory with a modern approach of fiscal federalism, based on agency theory. In this framework serves the yardstick competition as baseline model that leads to a Pareto efficient outcome, despite private information about the costs of service provision and rent-seeking activities of local policy makers. However, a first best solution is missed, if the local governments behave non-myopic. Despite this are both results from the perspective of principals (central level, local electorate) more advantageous than the outcome of a singular yardstick competition, which is in this comparison only third-best.


Mikrosimulation und Model Development
Auftragsforschung, seit Juni 2009

Inhalt dieses Projekts ist die kontinuierliche Weiterentwicklung der liechtensteinischen Mikrosimulationsmodelle. Die Mikrosimulationsmodelle microLIE:PIT und microLIE:CIT bilden die Besteuerung ... mehr



  • Lehrstuhl für Betriebswirtschaftliche Steuerlehre, Internationales und Liechtensteinisches Steuerrecht
  • Institut für Finance

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